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Impulsive recognition: what is enough to constitute a reputation in a "substantial part of the European Union"?

The Court of Justice of the European Union (CJ) has held that low market share in two member states is sufficient to demonstrate reputation of a Community trade mark.

The CJ has answered a number of referred questions from the Budapest Municipal Court.

Background

Relying on its earlier Community trade mark (CTM) for IMPULSE, Unilever opposed a Hungarian national trade mark application by Iron & Smith for a coloured figurative sign which included the words "be impulsive".

Article 4(3) Directive 2008/95/EC states that a trade mark should not be registered if it is similar to an earlier CTM which has a reputation in the Community and where the use of the later trade mark would without due cause take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier CTM.

Decision of the Hungarian IP Office

At first instance, Unilever's IMPULSE sign was held to have a sufficient reputation by the Hungarian Intellectual Property Office under Article 4(3), which following established case law is required to be "a significant part of the public concerned".

This conclusion was based on evidence of Unilever's 5% market share in the UK and 0.2% in Italy.

Questions to the CJ

Iron & Smith sought an annulment of this decision.

The court referred four questions to the CJ which concerned reputation, territory and the link (if any) between case law and evidence concerning reputation and genuine use.

Answers from the CJ

The CJ answered the referred questions as follows:

Article 4(3) should be interpreted such that if the reputation of an earlier CTM is restricted to a single member state, that does not need to be the same member state where the opposed national application has been filed.

If the earlier CTM is held not to have a reputation amongst the relevant public in the member state of the opposed application, the CTM proprietor should demonstrate that a commercially significant part of that public is familiar with the CTM; that they make a connection with the opposed application; and that there is actual (or a serious risk of) damage.

Case law regarding genuine use is not relevant in considering the question of reputation.

In short

This decision goes some way to clarify an area of law which can be confusing.

A national trade mark application may be successfully opposed by an earlier CTM with a reputation in a "substantial part of the EU", such reputation being based in other member state(s) to that where the national application has been filed.

However, where the reputation doesn't extend to the relevant member state, the owner should demonstrate that a commercially significant part of the public of that member state is familiar with the mark and makes a connection between it and the later mark, such that injury may follow.

Do not confuse with the law on demonstrating genuine use in the Community; that is a different animal.